Jonathan Lamore, a former CEO of the real estate investment and management firm Arciterra Companies LLC, was sentenced to five years in prison for manipulating the stock price of WeWork Inc. with a fake tender offer designed to fraudulently inflate the value of his own WeWork securities.
In the fall of 2023, Larmore created a fake real estate investment firm called Cole Capital Funds LLC and spent more than $775,000 buying tens of thousands of cheap, short-dated, out-of-the-money WeWork call options and hundreds of thousands of shares of WeWork common stock. On Nov. 3, 2023, Larmore published a fake press release announcing that Cole Capital proposed to acquire 51% of all outstanding shares owned by minority shareholders of WeWork at a more-than-700% premium in an all-cash offer worth more than $77 million.
At that time, WeWork was facing bankruptcy. But despite the boasts in the press release, Larmore and Cole Capital had no plans to execute the announced tender offer. Instead, the fake press release was used to fraudulently inflate WeWork’s share price and, by extension, increase the value of Larmore’s newly acquired WeWork call options and shares.
Approximately one minute after the press release about his fraudulent tender offer was published, WeWork’s share price quickly increased during after-hours trading by more than 70% and continued to rise to a high of more than 150% over the stock price prior to the publication of the press release. Larmore’s WeWork call options could have made him tens of millions of dollars with a big enough spike to WeWork’s stock price – however, most of the options expired the manipulative press release was published. WeWork filed for Chapter 11 bankruptcy protection on Nov. 6, 2023, and Larmore never followed through on his fraudulent tender offer.
Larmore was convicted of one count of tender offer fraud and one count of securities fraud following a one-week trial. In addition to the prison term, Larmore was sentenced to three years of supervised release during which he must perform 500 hours of community service.
“Jonathan Larmore treated the stock market like a game he could rig to obtain instant riches at the expense of innocent investors,” said Acting US Attorney Matthew Podolsky. “As today’s sentence shows, this office will continue to advocate for significant penalties against those who manipulate our markets and defraud investors.”
